Offer for Beazer Group-Part 2
Persimmon PLC
24 January 2001
Part 2
Appendix I
Conditions to the Offer
The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m. (London time) on the
first closing date of the Offer (or such later time(s) and/or
date(s) as Persimmon may, subject to the rules of the City
Code, decide) in respect of not less than 90 per cent. (or such
lower percentage as Persimmon may decide) in nominal value of
the Beazer Shares to which the Offer relates, provided that
this condition will not be satisfied unless Persimmon and/or
its wholly-owned subsidiaries shall have acquired or agreed to
acquire (whether pursuant to the Offer or otherwise) Beazer
Shares carrying in aggregate more than 50 per cent. of the
voting rights then normally exercisable at general meetings of
Beazer, including for this purpose (except to the extent
otherwise agreed by the Panel) any such voting rights attaching
to any Beazer Shares that are unconditionally allotted or
issued before the Offer becomes or is declared unconditional as
to acceptances, whether pursuant to the exercise of any
outstanding subscription or conversion rights or otherwise,
and, for this purpose:
(i) The expression 'Beazer Shares to which the Offer
relates' shall be construed in accordance with sections
428 to 430F of the Companies Act; and
(ii) Beazer Shares which have been unconditionally allotted
but not issued shall be deemed to carry the voting
rights which they will carry upon issue;
(b) the passing at an Extraordinary General Meeting of Persimmon
(or at any adjournment thereof) of such resolutions as may be
necessary to approve, implement and effect the Offer and the
acquisition of Beazer and of any Beazer Shares;
(c) the Admission of the New Persimmon Shares becoming effective in
accordance with the Listing Rules or the applicable rules of
the London Stock Exchange or (if Persimmon so determines and
subject to the consent of the Panel) the UK Listing Authority
and the London Stock Exchange agreeing to admit such shares to
the Official List and to trading, respectively;
(d) the proposals in connection with the proposed merger between
Bryant and Beazer, full particulars of which are set out in the
merger document issued by Bryant on 22nd December, 2000, not
proceeding in whole or in part and the offer contained in such
merger document lapsing;
(e) the Office of Fair Trading indicating in terms satisfactory to
Persimmon that it is not the intention of the Secretary of
State for Trade and Industry to refer the proposed acquisition
of Beazer by any member of the Persimmon Group or any matters
arising therefrom to the Competition Commission;
(f) all authorisations, orders, grants, recognitions,
confirmations, consents, clearances, certificates, licences,
permissions and approvals which are necessary or are reasonably
considered by Persimmon to be appropriate for or in respect of
the Offer having been obtained, in terms and in a form
reasonably satisfactory to Persimmon, and remaining in full
force and effect and no written notification of an intention to
revoke or not renew any of these having been received, and all
necessary notifications and filings for such purpose having
been made and all applicable waiting periods (including any
extensions thereof) under any applicable legislation or
regulation of any relevant jurisdiction having expired or
having been terminated (as appropriate), in each case in
connection with the Offer and all necessary statutory and
regulatory obligations in connection with the Offer in any
relevant jurisdiction having been complied with;
(g) no relevant authority having taken, instituted, implemented or
threatened any action, proceeding, suit, investigation or
enquiry, or enacted, made or proposed any statute, regulation
or order, or taken any other step that would or might
reasonably be expected to:
(i) require, prevent or delay the divestiture by any member
of the Wider Persimmon Group or the Wider Beazer Group
of all or any portion of their respective businesses,
assets or properties or impose any limitation on the
ability of any of them to conduct their respective
businesses or to own any of their respective
properties; or
(ii) require any member of either the Wider Persimmon Group
or the Wider Beazer Group to make an offer to acquire
any shares or other securities in any member of the
Wider Beazer Group owned by any third party; or
(iii) impose any limitation on the ability of any member of
the Wider Persimmon Group or any member of the Wider
Beazer Group to conduct their respective businesses or
to own or control their respective assets or
properties; or
(iv) make the Offer or its implementation or the acquisition
or proposed acquisition by Persimmon of all or any
Beazer Shares, or the acquisition or proposed
acquisition of control of Beazer, illegal, void or
unenforceable in or under the laws of any jurisdiction
or otherwise, directly or indirectly, restrain,
restrict, prohibit, challenge, delay or interfere with
the same, or impose additional conditions or
obligations with respect thereto, or otherwise require
material amendment to the terms of the Offer or any
such acquisition; or
(v) otherwise adversely affect in any respect any or all of
the businesses, assets, profits or prospects of any
member of the Wider Persimmon Group or any member of
the Wider Beazer Group; or
(vi) result in any member of the Wider Beazer Group ceasing
to be able to carry on business;
(h) there being no provision of any arrangement, agreement,
licence, permit, franchise or other instrument to which any
member of the Wider Beazer Group is a party, or by or to which
any such member of the Wider Beazer Group or any of its assets
is or are or may be bound, entitled or subject, which as a
result of the Offer or the proposed acquisition of any shares
in, or control of Beazer or otherwise would or might reasonably
be expected to result in:
(i) any moneys borrowed by or other indebtedness, or
liabilities of, or grant available to, any member of
the Wider Beazer Group being repayable or capable of
being declared repayable prior to their stated maturity
or the ability of any member of the Wider Beazer Group
to borrow any monies or incur any indebtedness being
withdrawn or inhibited or becoming capable of being
withdrawn; or
(ii) any such arrangement, agreement, licence, permit,
franchise or instrument being terminated or modified or
affected or any obligation or liability arising
thereunder or any action or effect being taken or
arising thereunder; or
(iii) the rights, liabilities, obligations or interests of
any member of the Wider Beazer Group under any such
arrangement, agreement, licence, permit, franchise or
instrument, or the interests of business of any such
member in or with any other firm or company or body or
person (or any arrangement or arrangements relating to
such business or interests), being terminated, modified
or affected; or
(iv) the creation of any mortgage, charge or other security
interest over the whole or any part of the business,
property or assets of any member of the Wider Beazer
Group or any such security (whenever arising or having
arisen) becoming enforceable; or
(v) any assets of any member of the Wider Beazer Group
being disposed of other than in the ordinary course of
business;
(i) except as publicly announced by Beazer (by the delivery of an
announcement to the Company Announcements Office of the London
Stock Exchange) prior to the date of this announcement, no
member of the Wider Beazer Group having, since 30th June, 2000,
the date to which Beazer's last published audited accounts were
made up:
(i) issued or agreed to issue, authorised or proposed the
issue of additional shares of any class, or securities
convertible into, or rights, warrants or options to
subscribe for or acquire, any such shares or
convertible securities (save as between Beazer and
wholly-owned subsidiaries of Beazer or, for options
granted pursuant to the Beazer Share Schemes before the
date of this announcement, or any shares issued
thereafter pursuant to any such options) or redeemed,
purchased or reduced any part of its share capital or
proposed any redemption, purchase or reduction of any
part of its share capital; or
(ii) merged with or demerged any body corporate or (other
than in the ordinary course of business) acquired or
disposed of, or mortgaged or charged or created any
security interest over, any assets or any right, title
or interest in any assets (including shares and trade
investments other than in the ordinary course of
business) or having authorised any such merger,
demerger, acquisition, disposal, mortgage, charge or
security interest; or
(iii) entered into or varied any contract, transaction,
arrangement or commitment (whether in respect of
capital expenditure or otherwise), otherwise than in
the ordinary course of business; or
(iv) issued, authorised or proposed the issue of, or made
any change in or to, any debentures or, save in the
ordinary course of business, incurred or increased any
indebtedness or contingent liability; or
(v) other than the dividend of 2.9p per Beazer Share
declared on 14th December, 2000, recommended, declared,
paid or made, or proposed the recommendation,
declaration, paying or making of, any bonus, dividend
or other distribution, whether in cash or otherwise,
other than to Beazer or wholly-owned subsidiaries of
Beazer; or
(vi) been unable, or admitted in writing that it is unable,
to pay its debts or having stopped or suspended (or
threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on
all or a substantial part of its business; or
(vii) waived or compromised any claim; or
(viii) proposed any voluntary winding up; or
(ix) entered into or varied, or made any offer (which
remains open for acceptance) to enter into or vary, the
terms of any service agreements with any of the
directors of Beazer; or
(x) entered into any contract, reconstruction,
amalgamation, commitment or other transaction or
arrangement which would be restrictive on the business
of any member of the Wider Persimmon Group or the Wider
Beazer Group; or
(xi) made any alteration to its memorandum or articles of
association; or
(xii) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Beazer
Group and any other person; or
(xiii) proposed, agreed to provide or modified the terms of
any share option scheme, incentive scheme or other
benefit relating to the employment or termination of
employment of any person employed by the Wider Beazer
Group; or
(xiv) entered into any contract, commitment, agreement or
arrangement or passed any resolution or made any offer
(which remains open for acceptance) with respect to, or
announced an intention to effect or to propose, any of
the transactions, matters or events referred to in this
condition (i);
(j) since 30th June, 2000, the date to which Beazer's last
published audited accounts were made up:
(i) there having been no receiver, administrative receiver
or other encumbrancer appointed over the assets of any
member of the Wider Beazer Group or any analogous
proceedings or steps having taken place under the laws
of any jurisdiction; or
(ii) no material adverse change having occurred in the
business, assets, financial or trading position or
profits of any member of the Wider Beazer Group; or
(iii) no litigation or arbitration proceedings, prosecution
or other legal proceedings having been instituted,
announced or threatened by or against or remaining
outstanding against any member of the Wider Beazer
Group; or
(iv) no contingent or other liability having arisen or
become apparent or increased; or
(v) no claim being made, and no circumstance having arisen
which might lead to a claim being made, under the
insurance of any member of the Wider Beazer Group; or
(vi) no investigation by any relevant authority having been
announced, implemented or instituted or remaining
outstanding in respect of any member of the Wider
Beazer Group;
(k) Persimmon not having discovered that:
(i) any financial, business or other information concerning
the Wider Beazer Group which has been publicly
disclosed at any time by or on behalf of any member of
the Wider Beazer Group contains any misrepresentation
of fact or omits to state a fact necessary to make any
information contained therein not misleading; or
(ii) any member of the Wider Beazer Group is subject to any
liability (contingent or otherwise) which is not
disclosed or reflected in the published audited
accounts of Beazer for the year ended 30th June, 2000;
(l) Persimmon not having discovered that:
(i) there has been an emission, disposal, discharge,
deposit, spillage or leak of waste or hazardous or
harmful substances on or about or from any property now
or previously owned, occupied or made use of by any
past or present member of the Wider Beazer Group which
would be likely to give rise to any liability (whether
actual or contingent) or cost on the part of any member
of Wider Beazer Group; or
(ii) there is or is likely to be any liability (whether
actual or contingent) or requirement to make good,
repair, re-instate or clean-up any property now or
previously owned, occupied or made use of by any past
or present member of the Wider Beazer Group; or
(iii) circumstances exist whereby a person or class of
persons would be likely to have any claim or claims in
respect of any product or process of manufacture or
materials used therein now or previously manufactured,
sold or carried out by any past or present member of
the Wider Beazer Group.
For the purposes of these conditions, 'relevant authority' means any central
bank, government, government department or governmental, quasi-governmental,
supranational, statutory or regulatory or environmental body, court, trade
agency, association, institution or professional or environmental association
or any other person or body in any jurisdiction.
Persimmon reserves the right to waive in whole or in part all or any of the
conditions set out in paragraphs (e) to (l) above. Persimmon shall not be
under any obligation to waive or treat as satisfied any of conditions (e) to
(l) by a date earlier than the latest date for the satisfaction thereof
notwithstanding that the other conditions of the Offer may at such earlier
date have been waived or satisfied and that there are at such earlier date no
circumstances indicating that any of such conditions may not be capable of
satisfaction.
If Persimmon is required by the Panel to make an offer for Beazer Shares under
the provisions of Rule 9 of the City Code, Persimmon may make such alterations
to the conditions of the Offer, including condition (a), as are necessary to
comply with the provisions of that Rule.
The Offer will lapse (unless otherwise agreed by the Panel) if, in relation to
the proposed Offer or any matter arising therefrom, there is a reference to
the Competition Commission before the later of 3.00 p.m. on the first closing
date of the Offer and the date when the Offer becomes or is declared
unconditional as to acceptances.
In circumstances where the Offer lapses, the Offer will cease to be capable of
further acceptance and persons accepting the Offer and Persimmon shall
thereupon cease to be bound by Forms of Acceptance delivered on or before the
date on which the Offer so lapses.
The Beazer Shares which are the subject of the Offer will be acquired fully
paid and free from all liens, charges, equitable interests, encumbrances,
rights of pre-emption or other third party rights of any nature and together
with all rights attaching thereto, including the right to receive all
dividends and other distributions declared, paid or made hereafter save for
the dividend of 2.9p per Beazer Share declared on 14th December, 2000.
The Offer will comply with English law and the City Code.
Appendix II
Financial effects of acceptance of the Offer
The following table shows, for illustrative purposes only and on the basis and
assumptions set out below, the financial effects on capital and income value
for a holder of one Beazer Share of acceptance of the Offer (ignoring the
treatment of fractional entitlements and taxation), on the Offer becoming or
being declared unconditional in all respects:
(a) Capital impact
(i) Increase over the market price on 13th December, 2000
Cash per Beazer Share 109.0p
Number of New Persimmon Shares 0.3086
Value of New Persimmon Shares received(1) 79.0p
Total value received 188.0p
Market value of a Beazer Share(2) 131.5p
Increase in capital value 56.5p
This represents an increase of: 43.0%
Notes:
(1) Based on the closing mid-market price of 256p per Persimmon
Share on 23rd January, 2001, being the latest practicable date
prior to this announcement.
(2) Based on the closing mid-market price of 131.5p per Beazer Share
on 13th December, 2000, (being the day prior to the announcement
of Beazer's proposed merger with Bryant).
(ii) Increase over the market price on 23rd January, 2001
Cash per Beazer Share 109.0p
Number of New Persimmon Shares 0.3086
Value of New Persimmon Shares received (1) 79.0p
Total value received 188.0p
Market value of a Beazer Share (2) 176.5p
Increase in capital value 11.5p
This represents an increase of: 6.5%
Notes:
(1) Based on the closing mid-market price of 256p per Persimmon
Share on 23rd January, 2001, being the latest practicable date
prior to this announcement.
(2) Based on the closing mid-market price of 176.5p per Beazer Share
on 23rd January, 2001, being the latest practicable date prior
to this announcement.
(b) Income impact
Total dividend per Persimmon Share (1) 11.50p
Number of New Persimmon Shares 0.3086
Dividends a Beazer Shareholder would have received based 3.55p
on the exchange ratio
Gross income from reinvestment of cash consideration (2) 5.55p
Total 9.10p
Total dividend per Beazer Share (3) 8.80p
Increase in gross income 0.30p
This represents an increase of: 3.37%
Notes:
(1) Based on the December 1999 final dividend of 7.6p and the June
2000 interim dividend of 3.9p per Persimmon Share.
(2) The gross income on the cash consideration has been calculated
on the assumption that the cash is reinvested to yield
approximately 5.09 per cent. per annum, being the gross yield
shown by the FT Actuaries average gross redemption yield for
medium coupon British Government securities of maturities of 5
to 10 years as published in the Financial Times on 23rd
January, 2001, the latest practicable date prior to this
announcement.
(3) Based on the June 2000 final dividend of 5.9p and the December
2000 interim dividend of 2.9p per Beazer Share.
Appendix III
Bases and sources
(a) The market value of Persimmon Shares on 23rd January, 2001 is
based on the closing middle-market price of a Persimmon Share of
256p as derived from the Daily Official List on 23rd January,
2001 (being the business day prior to this announcement).
(b) The market values of Beazer Shares on 13th December, 2000, 10th
January, 2001, and 23rd January, 2001 are based on the closing
middle-market prices of 131.5p, 163.5p and 176.5p as derived
from the Daily Official List on 13th December, 2000 (being the
day prior to the announcement of Beazer's merger with Bryant),
10th January, 2001 (being the day prior to the announcement by
Taylor Woodrow that it had approached the Board of Bryant) and
23rd January, 2001 (being the day prior to this announcement).
(c) The value of the Offer is based upon approximately 285.9 million
Beazer Shares in issue on 23rd January, 2001.
(d) The value of the Persimmon forecast final dividend for Beazer
Shareholders of 2.6p per Beazer share is based upon the
Persimmon forecast final dividend of 8.5p per Persimmon Share
and the share consideration of 0.3086 New Persimmon Shares for
each Beazer Share.
(e) The increase of 6.2p per Beazer Share in the value of the Offer,
by comparison with the Indicative Offer, is based upon the Offer
value of 188p compared to the value of the Indicative Offer of
184.8p (announced on 19th January, 2001) net of the value of the
Persimmon forecast final dividend per Beazer Share under the
Indicative Offer share exchange terms of 3.0p. The Persimmon
forecast final dividend per Beazer Share under the Indicative
Offer of 3.0p is based upon the share consideration of 0.349 New
Persimmon Shares for each Beazer Share.
The increase in the cash consideration payable to Beazer
Shareholders is based upon approximately 285.9 million Beazer
Shares in issue on 23rd January, 2001, the cash consideration
under the Offer of 109p per Beazer Share and the cash
consideration under the Indicative Offer of 92.5p per Beazer
Share.
(f) The market capitalisation of Persimmon is based upon
approximately 183.0 million Persimmon Shares in issue on 23rd
January, 2001.
(g) The information on Persimmon is extracted from the Persimmon
Annual Report and Accounts for the years ended 31st December,
1997, 1998 and 1999.
(h) The information on Beazer is extracted from the Beazer Annual
Report and Accounts for the years ended 30th June, 1998, 1999
and 2000.
(i) The combined historical cost base of £1,364.4 million is the sum
of £736.6 million, being the aggregate cost of sales and net
operating expenses of Beazer in the financial year ended 30th
June, 2000, and the sum of £627.8 million, being the aggregate
cost of sales and net operating expenses of Persimmon in the six
months to 31st December, 1999 and the six months to 30th June,
2000.
(j) For the purposes of the financial comparisons contained in this
announcement, no account has been taken of any liability to
taxation or the treatment of fractions of Persimmon Shares under
the Offer.
(k) Earnings enhancement statements are made on a fully diluted
basis, and on the assumption that the Offer becomes or is
declared unconditional in all respects within a normal bid
timetable.
(l) Pro forma financial information has been calculated using the
results of Beazer for the year to 30th June, 2000 and for
Persimmon for the six months to 31st December, 1999 and the six
months to 30th June, 2000, respectively.
Appendix IV
Estimated Cost Savings
Statement of estimated cost savings
The Persimmon Directors estimate that successful completion of the Acquisition
would result in pre-tax cost savings in excess of £20 million per annum* from
rationalising the combined regional office structure and other identified
costs. This should be viewed in the context of a combined historical cost
base of £1,364.4 million and a combined historical profit on ordinary
activities before taxation of £188.7 million. The Persimmon Directors expect
these cost savings to arise from the following main actions:
- the amalgamation of operations, principally from the elimination
of duplicated offices in the UK ; and
- the combination of head office and other central functions, and
the rationalisation of certain establishment costs, in the UK.
*This statement of estimated cost savings has been reviewed by KPMG and by ABN
AMRO. Copies of a letter from KPMG and a letter from ABN AMRO relating to
this statement are set out on the following pages.
Notes
(1) In arriving at the above estimate, the Persimmon Directors have
assumed the following:
- that the costs to run a Beazer office are similar to those of
Persimmon, having regard to the size and structure of
operations;
- that the departmental allocation of employees and other
support functions within the Beazer Group, including its head
office, is similar to that of the Persimmon Group, having
regard to the size and nature of operations; and
- that there will be no material change to the market dynamics
in the Enlarged Persimmon Group's principal markets as a
consequence of successful completion of the Acquisition.
(2) The sources of information which the Persimmon Directors have
used to arrive at the estimated cost savings referred to above
include Beazer's annual reports and accounts, brokers' research
and other industry publications, together with the Persimmon
Directors' knowledge of the industry.
(3) The Persimmon Directors have not been able to discuss with
management of Beazer the reasonableness of the bases of their
assumptions, to the extent they relate to the Beazer Group,
supporting the cost savings statement set out above. As a
result, the inherent risks in relation to such forward-looking
statements are greater.
(4) Due to the increased size of the Persimmon Group, as enlarged by
successful completion of the Acquisition, the Persimmon Directors
expect significant changes to the Enlarged Persimmon Group's
operations. Because of this, and the fact that the changes
relate to the future, the actual cost savings referred to above
may not be achieved, or those achieved could be materially
different from those estimated.
(5) The estimated ongoing savings referred to above do not include
savings which the Persimmon Directors anticipate can also be
achieved in other ways, such as revenue enhancements and enhanced
purchasing power.
Letter from KPMG relating to Persimmon's statement
--------------------------------------------------
of estimated cost savings
-------------------------
KPMG Audit Plc
1 The Embankment
Neville Street
Leeds
LS1 4DW
United Kingdom
The Directors
Persimmon plc
Persimmon House
Fulford
York YO19 4FE
The Directors
ABN AMRO Corporate Finance Limited
250 Bishopsgate
London EC2M 4AA
23rd January, 2001
Dear Sirs,
Persimmon plc
We refer to the statement made by the Directors of Persimmon plc ('the
Directors') set out in Appendix IV of the offer announcement ('the Statement')
dated 24th January, 2001, to the effect that:
'The Persimmon Directors estimate that successful completion of the
Acquisition would result in pre-tax cost savings in excess of £20 million per
annum from rationalising the combined regional office structure and other
identified costs.'
The Statement has been made in the context of the disclosures on page 19
setting out, inter alia, the basis of the Directors' belief (including sources
of information) supporting the Statement and their analysis and explanation of
the underlying constituent elements.
Responsibility
The Statement is the responsibility solely of the Directors. It is our
responsibility and that of ABN AMRO Corporate Finance Limited ('ABN AMRO') to
form respective opinions, as required by Note 8(b) on Rule 19.1 of the City
Code on Takeovers and Mergers ('the City Code'), as to whether the Statement
has been made by the Directors with due care and consideration.
Basis of opinion
We have discussed the Statement together with the relevant bases of belief
(including the assumptions and sources of information summarised in Notes (1)
and (2) to the Statement) with the Directors who developed the underlying
plans and with ABN AMRO. We have also considered the letter dated 23rd
January, 2001 from ABN AMRO to the Directors on the same matter. We conducted
our work in accordance with the Statements of Investment Circular Reporting
Standards issued by the Auditing Practices Board. Our work did not involve
any independent examinations of any of the financial or other information
underlying the Statement.
We do not express any opinion as to the achievability of the cost savings
estimated by the Directors. The Statement is subject to uncertainty as
described in Notes (3) and (4) to the Statement.
Opinion
On the basis of the foregoing, we report that in our opinion the Directors
have made the Statement, in the form and context in which it is made, with due
care and consideration.
Our work in connection with the Statement has been undertaken solely for the
purposes of reporting under Note 8(b) on Rule 19.1 of the City Code to the
Directors and to ABN AMRO. We accept no responsibility to Beazer or its
shareholders or any other person, (other than the Directors and ABN AMRO), in
respect of, or arising out of, or in connection with, that work.
Yours faithfully,
KPMG Audit Plc
Chartered Accountants
Letter from ABN AMRO relating to Persimmon's statement
------------------------------------------------------
of estimated cost savings
-------------------------
ABN AMRO Corporate Finance Limited
250 Bishopsgate
London
EC2M 4AA
The Directors
Persimmon plc
Persimmon House
Fulford
York YO19 4FE
23rd January, 2001
Dear Sirs,
Offer for Beazer Group Plc ('Beazer')
We refer to the statement regarding the estimate of cost savings ('the
Statement') made by Persimmon plc ('Persimmon') and set out in Appendix IV to
the offer announcement to be published on 24th January, 2001, for which the
Directors of Persimmon are solely responsible, to the effect that:
'The Persimmon Directors estimate that successful completion of the
Acquisition would result in pre-tax cost savings in excess of £20 million per
annum from rationalising the combined regional office structure and other
identified costs.'
We have discussed the Statement, together with the relevant bases of belief
(including the assumptions and sources of information summarised in Notes (1)
and (2) to the Statement), with the Directors of Persimmon and those officers
and employees of Persimmon and its subsidiaries ('the Persimmon Group') who
developed the underlying plans. The Statement is subject to uncertainty as
described in Notes (3) and (4) to the Statement and our work did not involve
any independent examinations of any of the financial or other information
underlying the Statement. We have relied upon the accuracy and completeness
of all the financial and other information reviewed by us and have assumed
such accuracy and completeness for the purposes of rendering this letter.
We do not express any opinion as to the achievability of the cost savings
estimated by Persimmon.
In giving the confirmation set out in this letter, we have reviewed the work
carried out by KPMG and have discussed with them the conclusions stated in
their letter of even date herewith.
On the basis of the foregoing, and in the form and context in which it is
made, we consider that the Statement by Persimmon has been made with due care
and consideration.
Our work in connection with the Statement has been undertaken solely for the
purposes of reporting under Note 8(b) on Rule 19.1 of the City Code to
Persimmon. We accept no responsibility to Beazer or its shareholders or any
other person, other than Persimmon, in respect of, arising out of, or in
connection with, that work.
Yours faithfully,
For and on behalf of
ABN AMRO Corporate Finance Limited
Julian Goodwin
Managing Director
Appendix V
Definitions
'ABN AMRO ABN AMRO Corporate Finance Limited
Corporate Finance'
'Acquisition' the proposed acquisition of Beazer to be effected by
means of the Offer
'Beazer' Beazer Group Plc
'Beazer Group' Beazer, its subsidiaries and subsidiary undertakings
'Beazer holders of Beazer Shares
Shareholders'
'Beazer Shares' the existing unconditionally allotted or issued and
fully paid ordinary shares of 25p each in the capital
of Beazer and any further such shares which are
unconditionally allotted or issued fully paid or
credited as fully paid before the date on which the
Offer ceases to be open for acceptance (or such earlier
date as Persimmon may, subject to the Code, decide)
including any such shares which are so allotted or
issued pursuant to the exercise of options granted
under the Beazer Share Schemes or otherwise
'Beazer Share the Beazer Discretionary Share Option Scheme 1994 and
Schemes' the Beazer Sharesave Scheme 1994
'Bryant' Bryant Group plc
'Code' or 'City the City Code on Takeovers and Mergers
Code'
'Companies Act' the Companies Act 1985
'Daily Official The Daily Official List of the London Stock Exchange
List'
'Enlarged the Persimmon Group as enlarged by the Acquisition
Persimmon Group'
'Extraordinary the extraordinary general meeting of Persimmon at which
General Meeting' resolutions required to be passed to approve and
implement the Acquisition will be proposed
'Form of the form of acceptance, election and authority relating
Acceptance' to the Offer to be despatched to Beazer Shareholders
with the Offer Document
'FSA' Financial Services Authority in its capacity as the
regulator of insurance business under the Insurance
Companies Act 1982, as regulator of banking business
under the Banking Act 1987 and as the UK Listing
Authority, as the case may be
'KPMG' KPMG Audit Plc
'Listing Rules' the listing rules of the UK Listing Authority
'London Stock London Stock Exchange plc
Exchange'
'Mix and Match the right of Beazer Shareholders to elect, subject to
Election' availability, to vary the proportions in which they
receive New Persimmon Shares and cash under the Offer
'New Persimmon the new Persimmon Shares to be issued, credited as
Shares' fully paid, pursuant to the Offer
'Offer' the offer by Persimmon for Beazer
'Offer Document' the formal offer document by which the Offer will be
made, which will contain and set out the terms and
conditions of the Offer
'Official List' the official list maintained by the UK Listing
Authority
'Overseas either a person (including an individual, partnership,
Shareholder' unincorporated syndicate, unincorporated organisation,
trust, trustee, custodian, executor, administrator or
other legal representative) in, or resident in, Canada,
Australia or Japan, or a US Person
'Panel' The Panel on Takeovers and Mergers
'Persimmon' Persimmon plc
'Persimmon the directors of Persimmon
Directors' or 'the
Board of
Persimmon'
'Persimmon Group' Persimmon, its subsidiaries and subsidiary undertakings
'Persimmon holders of Persimmon Shares
Shareholders'
'Persimmon Shares' ordinary shares of 10p each in Persimmon
'Securities Act' the US Securities Act of 1933, as amended
'UK' United Kingdom of Great Britain and Northern Ireland
'UK Listing the Financial Services Authority in its capacity as the
Authority' competent authority under the Financial Services Act
1986 for admission of securities to the Official List
'United States of the United States of America, its territories and
America', 'United possessions, any state of the United States of America
States' or 'US' and the District of Columbia or any areas subject to
its jurisdiction or any political subdivision thereof
'US Person' has the meaning ascribed to it by Regulation S under
the Securities Act
'Wider Beazer Beazer and its subsidiary undertakings or associated
Group' companies or any company, firm, partnership or joint
venture in which any of Beazer and its subsidiary
undertakings or associated companies have an interest
of 20 per cent. or more
'Wider Persimmon Persimmon and its subsidiary undertakings or associated
Group' companies or any company, firm, partnership or joint
venture in which any of Persimmon and its subsidiary
undertakings or associated companies have an interest
of 20 per cent. or more
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